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RIGHTS AGREEMENT
by and between
X. X. XXXXXX COMPANY, INC.
and
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
as Rights Agent
Dated as of
March 26, 1999
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TABLE OF CONTENTS
Section 1. Certain Definitions
Section 2. Appointment of Rights Agent
Section 3. Issuance of Rights Certificates
Section 4. Form of Rights Certificates
Section 5. Countersignature and Registration
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights
Section 8. Cancellation and Destruction of Rights Certificates
Section 9. Reservation and Availability of Shares of Preferred Stock
Section 10. Preferred Stock Record Date
Section 11. Adjustment of Exercise Price or Number of Shares
Section 12. Certification of Adjusted Exercise Price or Number of Shares
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power
Section 14. Fractional Rights and Fractional Shares
Section 15. Rights of Action
Section 16. Agreement of Right Holders
Section 17. Rights Certificate Holder Not Deemed a Stockholder
Section 18. Concerning the Rights Agent
Section 19. Merger or Consolidation of, or Change in Name of, the Rights Agent
Section 20. Duties of Rights Agent
Section 21. Change of Rights Agent
Section 22. Issuance of New Rights Certificates
Section 23. Redemption
Section 24. Notice of Proposed Actions
Section 25. Notices
Section 26. Supplements and Amendments
Section 27. Exchange
Section 28. Successors
Section 29. Benefits of this Rights Agreement
Section 30. Delaware Contract
Section 31. Counterparts
Section 32. Descriptive Headings
Section 33. Severability
Section 34. Determinations and Actions by the Board of Directors, Etc.
Exhibit A Summary of Rights
Exhibit B Form of Rights Certificate
Exhibit C Form of Second Amended Certificate of Designations Relating to the
Terms of the Series A Junior Participating Preferred Stock
RIGHTS AGREEMENT
Agreement, dated effective as of March 26, 1999, by and
between X. X. Penney Company, Inc., a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services L.L.C., as Rights Agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on March 10, 1999, the Board of Directors of the
Company authorized the issuance of, and declared a dividend payable in, one
right (a "Right") for each share of Common Stock, 50(cent) par value per share,
of the Company outstanding as of the close of business on March 26, 1999 (the
"Record Date"), each such Right representing the right to purchase one
one-thousandth of a share of Series A Junior Participating Preferred Stock of
the Company (the "Preferred Stock") having the rights and preferences set forth
in the Second Amended Certificate of Designations attached hereto as Exhibit C,
containing the resolutions adopted by the Board of Directors on March 10, 1999,
upon the terms and subject to the conditions hereinafter set forth; and
WHEREAS, the Board of Directors of the Company further
authorized the issuance of one Right (subject to adjustment) with respect to
each share of Common Stock which may be issued between the Record Date and the
earlier to occur of the Distribution Date or the Expiration Date (as such terms
are hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, is the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the Voting Stock (as such term is hereinafter defined) of the
Company then outstanding; provided, that, an Acquiring Person shall not include
(i) an Exempt Person (as such term is hereinafter defined) or (ii) any Person,
together with all Affiliates and Associates of such Person, who or which would
be an Acquiring Person solely by reason of (A) being the Beneficial Owner of
shares of Voting Stock of the Company, the Beneficial Ownership of which was
acquired by such Person (or his or its predecessor through merger,
consolidation, amalgamation or other similar legal succession) pursuant to any
action or transaction or series of related actions or transactions approved by
the Board of Directors before such Person otherwise became an Acquiring Person
or (B) a reduction in the number of outstanding shares of Voting Stock of the
Company pursuant to a transaction or a series of related transactions approved
by the Board of Directors of the Company; provided, further, that in the event
such Person described in this clause (ii) does not become an Acquiring Person by
reason of subclause (A) or (B) of this clause (ii), such Person nonetheless
shall become an Acquiring Person in the event such Person thereafter acquires
Beneficial Ownership of an additional 1% or more of the Voting Stock of the
Company then outstanding, unless the acquisition of such additional Voting Stock
would not result in such Person becoming an Acquiring Person by reason of
subclause (A) or (B) of this clause (ii). Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person" became the Beneficial Owner of a number
of shares of Common Stock such that the Person would otherwise qualify as an
"Acquiring Person" inadvertently (including, without limitation, because (A)
such Person was unaware that it Beneficially Owned a percentage of Common Stock
that would otherwise cause such Person to be an "Acquiring Person" or (B) such
Person was aware of the extent of its Beneficial Ownership of Common Stock but
had no actual knowledge of the consequences of such Beneficial Ownership under
this Rights Agreement) and without any intention of changing or influencing
control of the Company, then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this Rights Agreement unless
and until such Person shall have failed to divest itself, as soon as practicable
(as determined, in good faith, by the Board of Directors of the Company), of
Beneficial Ownership of a sufficient number of shares of Common Stock so that
such Person would no longer otherwise qualify as an "Acquiring Person."
(b) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended ("Exchange Act"), as in effect on the date of this
Rights Agreement.
(c) "Associate" of a Person (as such term is hereinafter
defined) shall mean (i) with respect to a corporation, any officer or director
thereof or of any Subsidiary (as such term is hereinafter defined) thereof, or
any Beneficial Owner (as such term is hereinafter defined) of 10% or more of any
class of equity security thereof, (ii) with respect to an association, joint
venture or other unincorporated organization, any officer or director thereof or
of a Subsidiary thereof or any Beneficial Owner of 10% or more ownership
interest therein, (iii) with respect to a partnership, any general partner
thereof or any limited partner thereof who is, directly or indirectly, the
Beneficial Owner of a 10% or greater ownership interest therein, (iv) with
respect to a limited liability company, any officer, director or manager thereof
or of a Subsidiary thereof or any member thereof who is, directly or indirectly,
the Beneficial Owner of a 10% or greater ownership interest therein, (v) with
respect to a business trust, any officer or trustee thereof or of any Subsidiary
thereof, (vi) with respect to any other trust or an estate, any trustee,
executor or similar fiduciary or any Person who has a 10% or greater interest as
a beneficiary in the income from or principal of such trust or estate, (vii)
with respect to a natural person, any relative or spouse of such person, or any
relative of such spouse, who has the same home as such person, and (viii) any
Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own," any securities (and correlative terms shall have correlative
meanings):
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the Exchange Act
and Regulations 13D and 13G thereunder, in each case as in
effect on the date hereof; or
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time or the fulfillment of a condition or both)
pursuant to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise of
conversion rights, exchange rights, other rights (other than
these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "Beneficially Own," securities tendered
pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or
exchange or (B) the right to vote, alone or in concert with
others, pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the "Beneficial Owner" of,
or to "Beneficially Own," any securities if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to
a proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under
the Exchange Act and (2) is not at that time reportable by
such Person on a Schedule 13D report under the Exchange Act
(or any comparable or successor report), other than by
reference to a proxy or consent solicitation being conducted
by such Person; or
(iii) which are Beneficially Owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except as described
in the proviso in clause (B) of subparagraph (ii) of this
paragraph (d)) or disposing of any securities of the Company;
provided, however, that for purposes of determining Beneficial
Ownership of securities under this Rights Agreement, officers
and directors of the Company solely by reason of their status
as such shall not constitute a group (notwithstanding that
they may be Associates of one another or may be deemed to
constitute a group for purposes of Section 13(d) of the
Exchange Act) and shall not be deemed to own shares owned by
another officer or director of the Company.
Notwithstanding anything in this paragraph (d) to the
contrary, a Person engaged in the business of underwriting securities shall not
be deemed the "Beneficial Owner" of, or to "Beneficially Own," any securities
acquired in good faith in a firm commitment underwriting, until the expiration
of forty days after the date of such acquisition.
(e) "Book-Entry" shall mean an uncertificated book-entry for
the Company's Common Stock.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday, or day on which banking institutions in the State of New York, Texas or
the state in which the office of the Rights Agent is located are authorized or
obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00
p.m., New York City time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
(h) "Common Stock," when used with reference to the Company,
shall mean the common stock, presently 50(cent) par value, of the Company.
"Common Stock," when used with reference to any Person other than the Company
which shall be organized in corporate form, shall mean the capital stock or
other equity security with the greatest voting power of such Person or, if such
other Person is a subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person. "Common Stock," when used with
reference to any Person other than the Company which shall not be organized in
corporate form, shall mean units of beneficial interest which shall represent
the right to participate in profits, losses, deductions and credits of such
Person and which shall be entitled to exercise the greatest voting power of such
Person.
(i) "Distribution Date" shall have the meaning set forth in
Section 3(b) hereof.
(j) "Exchange Act" shall have the meaning set forth in Section
1(b) hereof.
(k) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company or (iii) any employee benefit plan or employee stock
plan of the Company or any Subsidiary of the Company, or any trust or other
entity organized, appointed, established or holding Common Stock for or pursuant
to the terms of any such plan.
(l) "Exercise Price" shall have the meaning set forth in
Sections 4 and 7(b) hereof.
(m) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(n) "Fair Market Value" of any property shall mean the fair
market value of such property as determined in accordance with Section 11(b)
hereof.
(o) "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System or any successor thereto or other
comparable quotation system.
(p) "Person" shall mean any individual, firm, corporation or
other entity.
(q) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(r) "Record Date" shall have the meaning set forth in the
first Recital.
(s) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(t) "Rights Certificate" shall have the meaning set forth in
Section 3(d) hereof.
(u) "Stock Acquisition Date" shall mean the first date on
which there shall be a public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) or such earlier date as a majority of the
Board of Directors shall become aware of the existence of an Acquiring Person.
(v) "Subsidiary" of a Person shall mean any company or other
entity of which securities or other ownership interests having voting power
sufficient to elect a majority of the Board of Directors or other persons
performing similar functions are Beneficially Owned, directly or indirectly, by
such Person or by any company or other entity that is otherwise controlled by
such Person.
(w) "Summary of Rights" shall have the meaning set forth in
Section 3(a) hereof.
(x) "Trading Day" shall have the meaning set forth in Section
11(b) hereof.
(y) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or regulatory
authority in respect of any transfer of any security, instrument or right,
including Rights, shares of Common Stock and shares of Preferred Stock.
(z) "Voting Stock" shall mean (i) the Common Stock of the
Company and (ii) any other shares of capital stock of the Company entitled to
vote generally in the election of directors or entitled to vote together with
the Common Stock in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or winding
up. For purposes of this Agreement, Voting Stock shall include securities of the
type referred to in clauses (i) and (ii) above that trade on a "when issued"
basis on a national securities exchange or on the NASDAQ. For purposes of this
Agreement, a stated percentage of the Voting Stock shall mean a number of shares
of the Voting Stock as shall equal in voting power that stated percentage of the
total voting power of the then outstanding shares of Voting Stock in the
election of a majority of the Board of Directors or in respect of any merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation, dissolution or winding up.
Any determination required to be made by the Board of
Directors of the Company for purposes of applying the definitions contained in
this Section 1 shall be made by the Board of Directors in its good faith
judgment, and such determination shall be binding on the Rights Agent and the
holders of the Rights.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for the acts or omissions of any such
Co-Rights Agent.
Section 3. Issuance of Rights Certificates.
(a) On the Record Date (or as soon as practicable thereafter),
the Company or the Rights Agent shall send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit A (the "Summary of Rights"),
by first class mail, postage prepaid, to each record holder of the Common Stock
as of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Company.
(b) Until the Close of Business on the day which is the
earlier of (i) the tenth day after the Stock Acquisition Date or such earlier or
later date (not beyond the thirtieth day after the Stock Acquisition Date) as
the Board of Directors may from time to time fix by resolution adopted prior to
the Distribution Date that otherwise would have occurred or (ii) the tenth
business day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
the first public announcement of the intent of any Person (other than an Exempt
Person) to commence, a tender or exchange offer upon the successful consummation
of which such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 15% or more of the then outstanding shares of Voting Stock
of the Company (irrespective of whether any shares are actually purchased
pursuant to any such offer) (the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights shall be evidenced by the
Book-Entries, or certificates for, Common Stock registered in the name of the
holders of Common Stock (together with, in the case of Book-Entries
representing, or the certificates for, Common Stock outstanding as of the Record
Date, the Summary of Rights) and not by separate Book-Entries or Rights
Certificates and the record holders of the Common Stock represented by such
Book-Entries or certificates shall be the record holders of the Rights
represented thereby and (y) each Right shall be transferable only simultaneously
and together with the transfer of a share of Common Stock (subject to adjustment
as hereinafter provided). Until the Distribution Date (or, if earlier, the
Expiration Date), transfer on the Company's Direct Registration System of any
Common Stock represented by a Book-Entry or the surrender for transfer of any
certificate for Common Stock shall constitute the surrender for transfer of the
Right or Rights associated with the Common Stock evidenced thereby, whether or
not accompanied by a copy of the Summary of Rights.
(c) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date and, in certain circumstances
provided in Section 22 hereof, may be issued in respect of shares of Common
Stock that become outstanding after the Distribution Date. Certificates for
Common Stock and confirmations evidencing Book-Entries (including, without
limitation, certificates issued upon original issuance, dispensation from the
Company's treasury or transfer or exchange of Common Stock) after the Record
Date but prior to the earliest of the Distribution Date or the Expiration Date
(or, in certain circumstances as provided in Section 22 hereof, after the
Distribution Date) shall have impressed, printed, written or stamped thereon or
otherwise affixed thereto the following legend:
This [certificate] [confirmation] also evidences and
entitles the holder hereof to the same number of Rights (subject to
adjustment) as the number of shares of Common Stock represented by this
certificate, such Rights being on the terms provided under the Rights
Agreement between X. X. Xxxxxx Company, Inc. (the "Company") and
ChaseMellon Shareholder Services L.L.C., as Rights Agent (the "Rights
Agent"), dated as of March 26, 1999, as it may be amended from time to
time (the "Rights Agreement"), the terms of which are incorporated
herein by reference and a copy of which is on file at the principal
executive offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights shall be evidenced by
separate certificates and shall no longer be evidenced by this
certificate. The Company shall mail to the registered holder of this
certificate a copy of the Rights Agreement without charge within five
days after receipt of a written request therefor. UNDER CERTAIN
CIRCUMSTANCES AS PROVIDED IN SECTION 7(e) OF THE RIGHTS AGREEMENT,
RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR
AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
(d) As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested
and provided with all necessary information, send), by first class mail, postage
prepaid, to each record holder of the Common Stock as of the Close of Business
on the Distribution Date, as shown by the records of the Company, at the address
of such holder shown on such records, a certificate in the form provided by
Section 4 hereof (a "Rights Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so held. As of and
after the Distribution Date, the Rights shall be evidenced solely by such Rights
Certificates and may be transferred by the transfer of the Rights Certificate as
permitted hereby, separately and apart from any transfer of one or more shares
of Common Stock.
(e) In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (i) shall, with respect to shares of Common Stock
so issued or sold (x) pursuant to the exercise of stock options or under any
employee plan or arrangement or (y) upon the exercise, conversion or exchange of
other securities issued by the Company prior to the Distribution Date and (ii)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided that no such
Rights Certificate shall be issued if, and to the extent that, (i) the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued or (ii) appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase shares, certificate and assignment to be printed on the reverse
thereof), when, as and if issued, shall be substantially in the form set forth
in Exhibit B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Common Stock or the
Rights may from time to time be listed or as the Company may deem appropriate,
which do not affect the duties or responsibilities of the Rights Agent to
conform to usage or otherwise and as are not inconsistent with the provisions of
this Rights Agreement. Subject to the provisions of Section 22 hereof, Rights
Certificates evidencing Rights whenever issued, (i) shall be dated as of the
date of issuance of the Rights they represent and (ii) subject to adjustment
from time to time as provided herein, on their face shall entitle the holders
thereof to purchase such number of shares (including fractional shares which are
integral multiples of one one-thousandth of a share) of Preferred Stock as shall
be set forth therein at the price payable upon exercise of a Right provided by
Section 7(b) hereof as the same may from time to time be adjusted as provided
herein (the "Exercise Price").
(b) Notwithstanding any other provision of this Rights
Agreement, any Rights Certificate that represents Rights Beneficially Owned by
an Acquiring Person or any Affiliate or Associate thereof or any other Person
whose Rights shall become null and void pursuant to Section 7(e) shall have
impressed on, printed on, written on or otherwise affixed to it (if the Company
or the Rights Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate or a nominee of any of the foregoing) the following
legend:
The Beneficial Owner of the Rights represented by
this Rights Certificate is an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person. Accordingly, this Rights Certificate
and the Rights represented hereby shall become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) Each Rights Certificate shall be executed on behalf of the
Company by its Chairman of the Board, any President or any Senior or Vice
President, either manually or by facsimile signature, and have affixed thereto
the Company's seal or a facsimile thereof which shall be attested to by any
Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature. Each Rights Certificate shall be countersigned by the
Rights Agent either manually or by facsimile signature and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company who
shall have signed any Rights Certificate shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery of
the certificate by the Company, such Rights Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company. Any Rights Certificate may be signed
on behalf of the Company by any person who, on the date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, and receipt by the Rights
Agent of all necessary information, the Rights Agent will keep or cause to be
kept, at its principal office or one or more offices designated as the
appropriate place for the surrender of Rights Certificates upon exercise or
transfer, and in such other locations as may be required by law, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates and any Rights
Certificates that have a legend printed thereon pursuant to Section 4(b).
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates.
(a) Subject to the provisions of Sections 7(e), 7(f) and 14(b)
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the Expiration Date, any Rights
Certificate, may be (i) transferred or (ii) split up, combined or exchanged for
one or more other Rights Certificates, entitling the registered holder to
purchase a like number of shares of Preferred Stock as the Rights Certificate or
Rights Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer any Rights Certificate shall surrender
the Rights Certificate at the office of the Rights Agent designated for the
surrender of Rights Certificates with the form of certificate and assignment on
the reverse side thereof duly endorsed (or, enclosed with such Rights
Certificate, a written instrument of transfer in a form satisfactory to the
Company and the Rights Agent), duly executed by the registered holder thereof or
his attorney duly authorized in writing, and with such signature duly
guaranteed. Any registered holder desiring to split up, combine or exchange any
Rights Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate to be split up, combined or
exchanged at the office of the Rights Agent. Thereupon, the Rights Agent shall
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any Transfer Tax that may be
imposed in connection with any transfer, split up, combination or exchange of
any Rights Certificates. The Rights Agent shall have no duty or obligation under
this Section unless and until it is satisfied that all such Transfer Taxes have
been paid.
(b) Subject to the provisions of Sections 7(e), 7(f) and 14(b)
hereof, upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them and, if requested by the Company, reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
or upon surrender to the Rights Agent and cancellation of the Rights Certificate
if mutilated, the Company shall issue and deliver a new Rights Certificate of
like tenor to the Rights Agent for delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price;
Expiration Date of Rights.
(a) The Rights shall not be exercisable until, and shall
become exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Section 7(e) and 23(a) hereof). Except as otherwise provided herein, the Rights
may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly and
properly executed (with signatures duly guaranteed), to the Rights Agent at the
office of the Rights Agent designated for such purpose, together with payment of
the Exercise Price for each Right exercised, subject to adjustment as
hereinafter provided, at or prior to the Close of Business on the earlier of (i)
March 26, 2009 (or if the Distribution Date shall have occurred before March 26,
2009, at the Close of Business on the 90th day following the Distribution Date),
(ii) the date on which the Rights are redeemed as provided in Section 23 hereof
or (iii) the date the Rights are exchanged pursuant to Section 27 hereof (such
earlier date being herein referred to as the "Expiration Date").
(b) The Exercise Price shall initially be $140 for each one
one-thousandth (1/1,000) of a share of Preferred Stock issued pursuant to the
exercise of a Right. The Exercise Price and the number of shares of Preferred
Stock or other securities to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof. The Exercise Price shall be payable in lawful money of the United States
of America, in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a
Rights Certificate representing exercisable Rights with the form of election to
purchase duly and properly, executed, accompanied by payment by certified check,
cashier's check, bank draft or money order payable to the Company or the Rights
Agent of the Exercise Price for the shares to be purchased and an amount equal
to any applicable Transfer Tax required to be paid by the holder of the Rights
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall
thereupon promptly (i) requisition from any registrar or transfer agent (as may
be appropriate) of the Preferred Stock of the Company one or more certificates
representing the number of shares of Preferred Stock to be so purchased, and the
Company hereby authorizes and directs such registrar or transfer agent (as may
be appropriate) to comply with all such requests, (ii) as provided in Section
14(b), at the election of the Company, cause depositary receipts to be issued in
lieu of fractional shares of Preferred Stock, (iii) if the election provided for
in the immediately preceding clause (ii) has not been made, requisition from the
Company the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with Section 14(b) hereof, (iv) after receipt of such
Preferred Stock certificates and, if applicable, depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (v) when appropriate, after receipt, promptly deliver such cash
to or upon the order of the registered holder of such Rights Certificate;
provided, however, that in the case of a purchase of securities, other than
Preferred Stock, pursuant to Section 13 hereof, the Rights Agent shall promptly
take the appropriate actions corresponding in such case to that referred to in
the foregoing clauses (i) through (v) of this Section 7(c). Notwithstanding the
foregoing provisions of this Section 7(c), the Company may suspend the issuance
of shares of Preferred Stock upon exercise of a Right for a reasonable period
with prompt notice of such to the Rights Agent, not in excess of 120 days,
during which the Company seeks to register under the Securities Act of 1933, as
amended (the "Act"), and any applicable securities law of any other
jurisdiction, the shares of Preferred Stock to be issued pursuant to the Rights;
provided, however, that nothing contained in this Section 7(c) shall relieve the
Company of its obligations under Section 9(c) hereof.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Rights
Certificate or his assignee, subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement to
the contrary, from and after the time (the "Invalidation Time") when any Person
first becomes an Acquiring Person, any Rights that are Beneficially Owned by (x)
such Acquiring Person (or any Associate or Affiliate of such Acquiring Person),
(y) a transferee of such Acquiring Person (or any such Associate or Affiliate)
who becomes a transferee after the Invalidation Time or (z) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Invalidation Time pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (II) a transfer which the Board of Directors
has determined is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this Section 7(e), and
subsequent transferees of the Persons referred to in either clause (y) or (z)
above, shall be null and void without any further action and any holder of such
Rights shall thereafter have no rights whatsoever with respect to such Rights
under any provision of this Rights Agreement. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but the Company and the Rights Agent shall have no liability to
any holder of a Rights Certificate or any other Person as a result of the
Company's failure to make any determination with respect to an Acquiring Person
or its Affiliates, Associates or transferees hereunder. No Rights Certificate
shall be issued pursuant to Section 3 hereof that represents Rights Beneficially
Owned by an Acquiring Person or any other Person whose Rights would be null and
void pursuant to the provisions of this Section 7(e) or any Associate, Affiliate
or nominee thereof; no Rights Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person or any other Person whose Rights
would be void pursuant to the provisions of this Section 7(e) or any Associate,
Affiliate or nominee thereof; and any Rights Certificate delivered to the Rights
Agent for transfer to an Acquiring Person whose Rights would be void pursuant to
the provisions of this Section 7(e) shall be canceled.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate following the form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof or a Person referred to in clause (y) or (z) of Section 7(e)
and such other information as the Company or the Rights Agent shall reasonably
request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall cancel and retire, any Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares
of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or out of authorized and issued shares of Preferred Stock held
in its treasury, such number of shares of Preferred Stock as will from time to
time be sufficient to permit the exercise in full of all outstanding Rights. The
Company shall take such action as may be required for it to comply with the
foregoing sentence of this Section 9(a).
(b) The Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of Preferred Stock
issued or reserved for issuance in accordance with this Rights Agreement to be
listed, upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation on NASDAQ or any successor thereto or other comparable
quotation system.
(c) The Company covenants and agrees that it will take all
such actions as may be necessary to insure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates, for such shares (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as
soon as practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
shares of Preferred Stock purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for Preferred Stock, or (B) the Expiration
Date. The Company may temporarily suspend, for a period of time not to exceed
120 days, the issuance of shares of Preferred Stock upon exercise of a Right in
order to prepare and file a registration statement under the Act and permit it
to become effective. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "Blue Sky"
laws of the various states in connection with the exercisability of the Rights.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Act (if required) shall have been declared effective.
(e) The Company covenants and agrees that it will pay when due
and payable any and all Transfer Taxes which may be payable in respect of the
issuance or delivery of the Rights Certificates or of any shares of Preferred
Stock issued or delivered upon the exercise of Rights. The Company shall not,
however, be required to pay any Transfer Tax which may be payable in respect of
any transfer or delivery of a Rights Certificate to a Person other than, or the
issuance or delivery of certificates for Preferred Stock upon exercise of Rights
in a name other than that of, the registered holder of the Rights Certificate,
and the Company shall not be required to or issue or deliver a Rights
Certificate or certificate for Preferred Stock to a Person other than such
registered holder until any such Transfer Tax shall have been paid (any such
Transfer Tax being payable by the holder of such Rights Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such Transfer Tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for shares of Preferred Stock is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Preferred Stock represented thereby on, and such certificate shall be
dated as of, the date upon which the Rights Certificate evidencing such Rights
was duly surrendered and payment of the Exercise Price (and any applicable
Transfer Taxes) was made; provided, however, that, if the date of such surrender
and payment is a date upon which the Preferred Stock transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated as of, the next
succeeding Business Day on which the Preferred Stock transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate, as such, shall not be entitled to any rights of
a stockholder of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Exercise Price or Number of Shares.
The Exercise Price and the number of shares of Preferred Stock which may be
purchased upon exercise of a Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Rights Agreement (A) declare or pay any dividend
on Common Stock payable in shares of Common Stock, (B)
subdivide or split the outstanding shares of Common Stock into
a greater number of shares or (C) combine or consolidate the
outstanding shares of Common Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of
Common Stock, then and in each such event the number of shares
of Preferred Stock issuable upon the exercise of a Right after
the record date for such event (if one shall have been
established or, if not, after the date of such event) shall be
the number of shares of Preferred Stock issuable immediately
prior to such event multiplied by a fraction the numerator of
which is the number of Rights outstanding immediately prior to
such event and the denominator of which is the number of
Rights outstanding immediately after such event and the
Exercise Price after such event shall be the Exercise Price in
effect immediately prior to such event multiplied by such
fraction. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof,
the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) Subject to Section 27 of this Agreement, in the
event that any Person (other than an Exempt Person), alone or
together with its Affiliates and Associates, shall become an
Acquiring Person, then, subject to the last sentence of
Section 23(a) and except as otherwise provided in this Section
11, each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive upon
exercise of such Right in accordance with the terms of this
Rights Agreement and payment of the Exercise Price, the
greater of (1) the number of one one-thousandths of a share of
Preferred Stock for which such Right was exercisable
immediately prior to the first occurrence of the event
described in this Section 11(a)(ii) (whether or not the Rights
are then exercisable) or (2) such number of one
one-thousandths of a share of Preferred Stock as shall equal
the result obtained by dividing the Exercise Price by 50% of
the Fair Market Value of one one-thousandth of a share of
Preferred Stock (determined pursuant to Section 11(b) hereof)
on the date of such first occurrence; provided, however, that
if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of
Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to
this Section 11(a)(ii).
(iii) In the event that the Company does not have
available sufficient authorized but unissued Preferred Stock
to permit the adjustments required pursuant to the foregoing
subparagraph (i) or the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company
shall take all such actions as may be necessary to authorize
and reserve for issuance such number of additional shares of
Preferred Stock as may from time to time be required to be
issued upon the exercise in full of all Rights from time to
time outstanding and, if necessary, shall use its best efforts
to obtain stockholder approval thereof. In lieu of issuing
shares of Preferred Stock in accordance with the foregoing
subparagraphs (i) and (ii), the Company may, if the Board of
Directors determines that such action is necessary or
appropriate and not contrary to the interests of holders of
Rights, elect to issue or pay, upon the exercise of the
Rights, (A) cash, (B) other equity securities of the Company,
(C) debt securities of the Company, (D) other assets or (E)
any combination of the foregoing, in each case, having an
aggregate Fair Market Value equal to the Fair Market Value of
the shares of Preferred Stock which otherwise would have been
issuable pursuant to Section 11(a)(ii), which Fair Market
Value shall be determined by an investment banking firm
selected by the Board of Directors. For purposes of the
preceding sentence, the Fair Market Value of the Preferred
Stock shall be as determined pursuant to Section 11(b).
Subject to Section 23 hereof, any such election by the Board
of Directors of the Company must be made and publicly
announced within thirty (30) days after the date on which the
event described in Section 11(a)(ii) occurs.
(b) For the purpose of this Rights Agreement, the "Fair Market
Value" of any share of Preferred Stock, Common Stock or any other stock or any
Right or other security or any other property on any date shall be determined as
provided in this Section 11(b). In the case of a publicly-traded stock or other
security, the Fair Market Value on any date shall be deemed to be the average of
the daily closing prices per share of such stock or per unit of such other
security for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to but not including such date; provided, however,
that in the event that the Fair Market Value per share of any share of Common
Stock is determined during a period which includes any date that is within 30
Trading Days after (i) the ex-dividend date for a dividend or distribution on
such stock payable in shares of Common Stock or securities convertible into
shares of Common Stock, or (ii) the effective date of any subdivision, split,
combination, consolidation, reverse stock split or reclassification of such
stock, then, and in each such case, the Fair Market Value shall be appropriately
adjusted by the Board of Directors of the Company to take into account
ex-dividend or post-effective date trading. The closing price for any day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way (in
either case, as reported in the applicable transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange), or, if the securities are not listed or admitted to trading on the
New York Stock Exchange, as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange on which such security is listed or admitted to trading; or, if not
listed or admitted to trading on any national securities exchange, the last
quoted price (or, if not so quoted, the average of the high bid and low asked
prices) in the over-the-counter market, as reported by NASDAQ or such other
system then in use; or, if no bids for such security are quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such security selected by the Board
of Directors of the Company. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which such security is listed or
admitted to trading is open for the transaction of business or, if such security
is not listed or admitted to trading on any national securities exchange, a
Business Day. If a security is not publicly held or not so listed or traded,
"Fair Market Value" shall mean the fair value per share of stock or per other
unit of such other security, as determined by an independent investment banking
firm experienced in the valuation of securities selected in good faith by the
Board of Directors of the Company, or, if no such investment banking firm is, in
the good faith judgment of the Board of Directors, available to make such
determination, in good faith by the Board of Directors of the Company; provided,
however, that for purposes of making the adjustment provided for by Section
11(a)(ii) hereof, the Fair Market Value of a share of Preferred Stock shall not
be less than 100% of the product of the Fair Market Value of a share of Common
Stock multiplied by the higher of the then Dividend Multiple or Vote Multiple
applicable to the Preferred Stock (as defined in the provisions of the Second
Amended Certificate of Designations relating to the Preferred Stock) and shall
not exceed 105% of the product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock. In the case of property other than
securities, the "Fair Market Value" thereof shall be determined in good faith by
the Board of Directors of the Company based upon such appraisals or valuation
reports of such independent experts as the Board of Directors of the Company
shall in good faith determine to be appropriate in accordance with good business
practices and the interests of the holders of Rights. Any such determination of
Fair Market Value shall be described in a statement filed with the Rights Agent
and shall be binding upon the Rights Agent.
(c) All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-thousandth of a share, as the case
may be.
(d) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Exercise Price and the number of shares to be issued
upon exercise of the Rights as in the initial Rights Certificates issued
hereunder but, nevertheless, shall represent the Rights as so adjusted.
(e) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Preferred Stock upon exercise of
the Rights below the then par value, if any, of the shares of Preferred Stock,
the Company shall use its best efforts to take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and non-assessable shares of such Preferred
Stock at such adjusted purchase price per share.
(f) Anything in this Section 11 to the contrary
notwithstanding, in the event of any reclassification of stock of the Company or
any recapitalization, reorganization or partial liquidation of the Company or
similar transaction, the Company shall be entitled to make such further
adjustments in the number of shares of Preferred Stock which may be acquired
upon exercise of the Rights, and such adjustments in the Exercise Price
therefor, in addition to those adjustments expressly required by the other
paragraphs of this Section 11, as the Board of Directors of the Company shall
determine to be necessary or appropriate in order for the holders of the Rights
in such event to be treated equitably and in accordance with the purpose and
intent of this Rights Agreement or in order that any such event shall not, but
for such adjustment, in the opinion of counsel to the Company, result in the
stockholders of the Company being subject to any United States federal income
tax liability by reason thereof.
(g) In the event the Company shall at any time after the
Record Date make any distribution on the shares of Common Stock of the Company,
whether by way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Company or otherwise, in cash or
any debt security, debt instrument, real or personal property or any other
property (other than any shares of Common Stock or other capital stock of the
Company and other than any right or warrant to acquire any such shares,
including any debt security convertible into or exchangeable for any such share,
at less than the Fair Market Value of such shares) and the amount of such cash
dividend or the Fair Market Value of such debt security, debt instrument or
property exceeds 150% of the aggregate amount of the cash dividends declared or
paid on the Common Stock of the Company in the 15-month period immediately
preceding such distribution, then and in each such event, unless such
distribution is part of or is made in connection with a transaction to which
Section 11(a)(ii) or Section 13 hereof applies, the Exercise Price shall be
reduced by an amount equal to the cash or the Fair Market Value of such
distribution, as the case may be, per share of Common Stock of the Company. For
purposes hereof, the Fair Market Value of any property distributed to the
holders of shares of Common Stock of the Company shall be the Fair Market Value
of such property as determined by an independent investment banking firm
experienced in the valuation of securities or the other property so distributed,
as the case may be, selected in good faith by the Board of Directors of the
Company, or, if no such investment banking firm is in the good faith judgment of
the Board of Directors available to make such determination, in good faith by
the Board of Directors of the Company, whose determination shall be final and
binding on the Company, the Rights Agent and the holders of Rights.
Section 12. Certification of Adjusted Exercise Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11, 13 or
23(c), the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts and computations giving rise to
such adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate in accordance with
Section 25. Notwithstanding the foregoing sentence, the failure of the Company
to make such certification or give such notice shall not affect the validity of
or the force or effect of the requirement for such adjustment. Any adjustment to
be made pursuant to Section 11, 13 or 23(c) of this Rights Agreement shall be
effective as of the date of the event giving rise to such adjustment. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall have no duty with respect to and shall
not be deemed to have knowledge of any adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, at any time after the time that any
Person becomes an Acquiring Person, (x) the Company shall, directly or
indirectly, consolidate with, or merge with and into, any other Person or
Persons (other than an Exempt Person or Persons) and the Company shall not be
the surviving or continuing company of such consolidation or merger, or (y) any
Person or Persons (other than an Exempt Person) shall, directly or indirectly,
consolidate with, or merge with and into, the Company, and the Company shall be
the continuing or surviving company of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (other than an Exempt Person) or of the Company
or cash or any other property, or (z) the Company or one or more of its
Subsidiaries shall, directly or indirectly, sell or otherwise transfer to any
other Person or any Affiliate or Associate of such Person, in one or more
transactions, or the Company or one or more of its Subsidiaries shall sell or
otherwise transfer to any Persons in one or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole), then, on the first
occurrence of any such event, proper provision shall be made so that (i) each
holder of record of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof and payment of
the Exercise Price in accordance with the terms of this Rights Agreement, such
number of shares of validly issued, fully paid, non-assessable and freely
tradable Common Stock of the Principal Party (as defined herein), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims, as
shall equal the result obtained by dividing the Exercise Price by 50% of the
Fair Market Value of the Common Stock of the Principal Party on the date of the
consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Rights Agreement; (iii) the term "Company" for all
purposes of this Rights Agreement shall thereafter be deemed to refer to such
Principal Party; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common
Stock in accordance with the provisions of Section 9 hereof applicable to the
reservation of Preferred Stock) in connection with such consummation as may be
necessary to insure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; provided, however, that,
upon the subsequent occurrence of any merger, consolidation, sale of all or
substantially all of the assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Exercise Price, such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had it, at the time of such transaction, owned the shares of Common
Stock of the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the occurrence of any event
described in clause (x), (y) or (z) above of this Section 13(a).
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (x)
or (y) of the first sentence of Section 13(a) hereof: (A) the
Person that is the issuer of the securities into which shares
of Common Stock of the Company are changed or otherwise
exchanged or converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer of the Common
Stock of which has the greatest market value or (B) if no
securities are so issued, (x) the Person that is the other
party to the merger or consolidation and that survives such
merger or consolidation, or, if there is more than one such
Person, the Person the Common Stock of which has the greatest
market value or (y) if the Person that is the other party to
the merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z)
of the first sentence in Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as is the
issuer of Common Stock having the greatest market value of
shares outstanding; provided, however, that in any such case,
if the Common Stock of such Person is not at such time and has
not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person
the Common Stock of which is and has been so registered, the
term "Principal Party" shall refer to such other Person, or if
such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of all of which are and
have been so registered, the term "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common
Stock having the greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger
or sale or transfer of assets or earning power referred to in Section 13(a)
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights in accordance with this Section 13 and unless
prior thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Rights Agreement in
accordance with Section 13(a) hereof and that all rights of first refusal or
preemptive rights in respect of the issuance of shares of Common Stock of the
Principal Party upon exercise of outstanding Rights have been waived and that
such transaction shall not result in a default by the Principal Party under this
Rights Agreement, and further providing that, as soon as practicable after the
date of any consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a) hereof, the Principal Party will:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration
statement to become effective as soon as practicable after
such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the
date of expiration of the Rights, and similarly comply with
applicable state securities laws;
(ii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or to
meet the eligibility requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act. In the event
that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction
described in Section 11(a)(ii) hereof, the Rights which have
not theretofore been exercised shall, subject to the
provisions of Section 7(e) hereof, thereafter be exercisable
in the manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-Laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then Fair
Market Value per share (determined pursuant to Section 11(b) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then Fair Market Value (other than to holders of Rights
pursuant to this Section 13) or (ii) providing for any special tax or similar
payment in connection with the issuance to any holder of a Right of Common Stock
of such Principal Party pursuant to the provisions of this Section 13, then, in
such event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived or amended, or
that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional Rights
(i.e., Rights to acquire less than one one-thousandth of a share of Preferred
Stock), unless such fractional Rights result from a transaction referred to in
Section 11(a)(i) hereof. If the Company shall determine not to issue such
fractional Rights, then, in lieu of such fractional Rights, there shall be paid
to the holders of record of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the Fair Market Value of a whole Right.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one-thousandth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one-thousandth of a share). In lieu of issuing fractions
of shares of Preferred Stock, the Company may, at its election, issue depositary
receipts evidencing fractions of shares pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary receipts shall have
all of the rights, privileges and preferences to which they would be entitled as
owners of the Preferred Stock. With respect to fractional shares that are not
integral multiples of one-thousandth of a share, if the Company does not issue
such fractional shares or depositary receipts in lieu thereof, there shall be
paid to the holders of record of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect
of this Rights Agreement, except the rights of action given to the Rights Agent
under this Agreement, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the holders of record
of the Common Stock); and any holder of record of any Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and, in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Rights Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this Rights
Agreement.
Section 16. Agreement of Right Holders. Each holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights shall be
evidenced by the Book-Entries representing, or the certificates for, Common
Stock registered in the name of the holders of Common Stock (together, as
applicable, with the Summary of Rights), which Book-Entries representing, or the
certificates for, Common Stock shall also constitute certificates for Rights,
and not by separate Rights Certificates, and each Right shall be transferable
only simultaneously and together with the transfer of shares of Common Stock;
(b) After the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the
person in whose name the Rights Certificate (or, prior to the Distribution Date,
the associated Book-Entry representing, or certificate for, Common Stock) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary.
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation.
The Company must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible; and
(e) Rights Beneficially Owned by certain persons will under
certain circumstances set forth in this Agreement become null and void pursuant
to Section 7(e) hereof; and
(f) This Agreement may be supplemented or amended from time to
time pursuant to Section 26 hereof.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of Preferred
Stock or any other securities which may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof (except as provided in Section 7(f) hereof),
or to give or withhold consent to any corporate action (except as provided in
Section 7(f) hereof), or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration, preparation, delivery,
amendment and execution of this Rights Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Rights Agreement,
including without limitation, the costs and expenses of defending against any
claim of liability relating directly or indirectly to the Rights or this Rights
Agreement. The indemnity provided herein shall survive the termination of this
Agreement and the termination and the expiration of the Rights. The costs and
expenses incurred in enforcing this right of indemnification shall be paid by
the Company. Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage. Any liability of the Rights Agent under this Rights
Agreement will be limited to the amount of fees paid by the Company to the
Rights Agent.
(b) The Rights Agent shall be authorized and protected
against, and shall incur no liability for or in respect of, any action taken,
suffered or omitted by it in connection with its administration of this Rights
Agreement in reliance upon any Rights Certificate or certificate for Preferred
Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation of, or Change in Name of,
the Rights Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Rights Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such Person would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by
this Rights Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; in case
at that time any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either in its prior
name or in its changed name; in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Rights
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes only the duties and obligations expressly imposed by this Rights
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates by their acceptance thereof shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including without limitation, the identity of any Acquiring
Person and the determination of current per share market price) be proved or
established by the Company prior to taking, suffering or omitting any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, any President
or any Senior or Executive Vice President of the Company and delivered to the
Rights Agent. Any such certificate shall be full authorization and protection to
the Rights Agent and the Rights Agent shall incur no liability for or in respect
of any action taken, suffered or omitted in good faith by it under the
provisions of this Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights Agreement or
in the Rights Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this Rights Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Rights
Agreement or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Sections 3, 11, 13, 23 and 27 hereof
or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after receipt of a certificate furnished pursuant to Section 12, describing any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock to be issued pursuant to this Rights Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of the Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, any President or any Senior or Executive Vice
President of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken, suffered or omitted by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
these instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken, suffered or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
suffered or such omission shall be effective. The Rights Agent shall not be
liable for any action taken or suffered by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken,
suffered or omitted.
(h) The Rights Agent and any shareholder, director, affiliate,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become financially interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Rights Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct, in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if it believes that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has not been completed to certify the holder is not
an Acquiring Person (or an Affiliate or Associate thereof), the Rights Agent
shall not take any further action with respect to such requested exercise or
transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days notice in writing mailed to the Company and to
each transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent (with or without cause) upon 30 days notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and the Preferred Stock by registered or certified
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the incumbent Rights Agent or the holder of
record of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
of any state thereof or the District of Columbia, in good standing, which is
authorized to do business under such laws and is subject to supervision or
examination by federal or state authorities and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate controlled by a corporation described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed, but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Notwithstanding the foregoing provisions, in the event of resignation, removal
or incapacity of the Rights Agent, the Company shall have the authority to act
as the Rights Agent until a successor Rights Agent shall have assumed the duties
of the Rights Agent hereunder.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price per share and the number
or kind or class of shares of stock or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this
Rights Agreement.
Section 23. Redemption.
(a) The Company may, at its option, but only by the vote of a
majority of the Board of Directors, redeem all but not less than all of the then
outstanding Rights, at any time prior to the Close of Business on the earlier of
(i) the tenth day following the Stock Acquisition Date (subject to extension by
the Company as provided in Section 26 hereof) or (ii) the Expiration Date, at a
redemption price of $0.005 per Right, subject to adjustments as provided in
subsection (c) below (the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the Company's right of
redemption hereunder.
(b) Without any further action and without any notice, the
right to exercise the Rights will terminate effective at the time so designated
by action of the Board of Directors ordering the redemption of the Rights and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 days after the effective time of the action of the
Board of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each notice of
redemption will state the method by which the payment of the Redemption Price
will be made. At the option of the Board of Directors, the Redemption Price may
be paid in cash to each Rights holder or by the issuance of shares (and, at the
Company's election pursuant to Section 14(b) hereof, cash or depositary receipts
in lieu of fractions of shares other than fractions which are integral multiples
of one one-thousandth (1/1,000) of a share) of Preferred Stock or Common Stock
having a Fair Market Value equal to such cash payment.
(c) In the event the Company shall at any time after the date
of this Rights Agreement (A) pay any dividend on Common Stock in shares of
Common Stock, (B) subdivide or split the outstanding shares of Common Stock into
a greater number of shares or (C) combine or consolidate the outstanding shares
of Common Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, or (D) combine or consolidate the
outstanding shares of Common Stock into a smaller number of shares of its
capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving company), then, and in each such event,
the Redemption Price shall be appropriately adjusted to reflect the foregoing.
Section 24. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section 11(a)(i) or
11(g) or (ii) to offer to the holders of record of its Common Stock options,
warrants, or other rights to subscribe for or to purchase shares of Common Stock
(including any security convertible into or exchangeable for Common Stock) or
shares of stock of any class or any other securities, options, warrants,
convertible or exchangeable securities or other rights, or (iii) to effect any
reclassification of its Preferred Stock or Common Stock or any recapitalization
or reorganization of the Company, or (iv) to effect any consolidation or merger
with or into, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of record of a Rights
Certificate and the Rights Agent, in accordance with Section 25, notice of such
proposed action, which shall specify the record date for the purposes of such
transaction referred to in Section 11(a)(i) or such dividend or distribution, or
the date on which such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation, dissolution, or
winding up is to take place and the record date for determining participation
therein by the holders of record of Common Stock or Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of record of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of record of Common Stock or Preferred Stock, whichever shall be
the earlier. The failure to give notice required by this Section 24 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
(b) In case any of the transactions referred to in Section
11(a)(i), 11(g) or 13 of this Rights Agreement are proposed, then, in any such
case, the Company shall give to each holder of Rights and the Rights Agent, in
accordance with Section 25 hereof, notice of the proposal of such transaction at
least 10 days prior to consummating such transaction, which notice shall specify
the proposed event and the consequences of the event to holders of Rights under
Section 11(a)(i), 11(g) or 13 hereof, as the case may be, and, upon consummating
such transaction, shall similarly give notice thereof to each holder of Rights.
Section 25. Notices. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the holder of
record of any Rights Certificate or Right to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
X. X. Xxxxxx Company, Inc.
0000 Xxxxxx Xxxxx
Xxxxx, XX 00000-0000
(000) 000-0000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of record
of any Rights Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services L.L.C.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxx
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Rights
Certificate or Right shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 26. Supplements and Amendments. For as long as the
Rights are then redeemable, the Company may in its sole and absolute discretion,
and the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of the Rights.
At any time when the Rights are not then redeemable, the Company may, and the
Rights Agent shall if the Company so directs, supplement or amend this Rights
Agreement without the approval of any holders of Rights Certificates (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein or (iii)
to change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable, provided that no such supplement or amendment
pursuant to this clause (iii) shall materially adversely affect the interest of
the holders of Rights Certificates. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, and such
supplement or amendment does not change or increase the Rights Agent's duties,
liabilities or obligations, the Rights Agent shall execute such supplement or
amendment.
Section 27. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof) for
shares of Common Stock at an exchange ratio of one share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Voting Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 27 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of the
holders of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange with prompt notice thereof to the Rights Agent; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the shares of Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 27, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Rights Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock for the Trading Day immediately prior to the date of exchange pursuant to
this Section 27.
Section 28. Successors. All of the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any Person or corporation other
than the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the holders of Common Stock
in their capacity as holders of the Rights) any legal or equitable right, remedy
or claim under this Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the holders of
record of the Rights Certificates (and, prior to the Distribution Date, the
holders of Common Stock in their capacity as holders of the Rights).
Section 30. Delaware Contract. This Rights Agreement and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state; provided,
however, that all provisions regarding the rights, duties and obligations of the
Rights Agent shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed entirely
within such State.
Section 31. Counterparts. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 33. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this rights
agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 34. Determinations and Actions by the Board of
Directors, Etc.
(a) The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board of Directors or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board of Directors in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors to any
liability to the holders of the Rights.
(b) It is understood that the TIDE Committee (as described
below) of the Board of Directors shall review and evaluate this Agreement in
order to consider whether the maintenance of this Agreement continues to be in
the interests of the Company, its shareholders and any other relevant
constituencies of the Company, at least every three years, or sooner if any
Person shall have made a proposal to the Company, or taken any other action,
that, if effective, could cause such Person to become an Acquiring Person
hereunder, if a majority of the members of the TIDE Committee shall deem such
review and evaluation appropriate after giving due regard to all relevant
circumstances. Following each such review, the TIDE Committee will communicate
its conclusions to the full Board of Directors, including any recommendation in
light thereof as to whether this Agreement should be modified or the Rights
should be redeemed. The TIDE Committee shall be appointed by the Board of
Directors of the Company and shall be comprised of Directors of the Company who
are not officers, employees or Affiliates of the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, this 10th day of March, to be effective as of the
day and year first above written.
X. X. XXXXXX COMPANY, INC.
By _________________________
Name:
Title:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.,
as Rights Agent
By _________________________
Name:
Title:
EXHIBIT A
TO RIGHTS AGREEMENT
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS
AGREEMENT (AS REFERRED TO BELOW), RIGHTS ISSUED TO OR
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES
OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE
NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
X. X. PENNEY COMPANY, INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On March 10, 1999, the Board of Directors of X. X. XXXXXX
COMPANY, INC. (the "Company") declared a dividend distribution of one preferred
stock purchase right for each outstanding share of Common Stock, 50(cent) par
value per share (the "Common Stock"), of the Company held by stockholders of
record on March 26, 1999 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company one one-thousandth (1/1,000) of a share of
preferred stock of the Company, designated as Series A Junior Participating
Preferred Stock (the "Preferred Stock") at a price of $140 per one
one-thousandth (1/1,000) of a share (the "Exercise Price"). The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement"), approved on March 10, 1999 and dated as of March 26, 1999, between
the Company and ChaseMellon Shareholder Services L.L.C., as Rights Agent (the
"Rights Agent").
As discussed below, initially the Rights will not be
exercisable, certificates will not be sent to stockholders and the Rights will
automatically trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day following the first date (the
"Stock Acquisition Date") on which there is a public announcement that a person
or group of affiliated or associated persons, with certain exceptions set forth
below, has acquired beneficial ownership of 15% or more of the outstanding
voting stock of the Company (an "Acquiring Person") or such earlier or later
date (not beyond the thirtieth day after the Stock Acquisition Date) as the
Board of Directors may determine or (ii) the tenth business day (or such later
date as may be determined by the Board of Directors prior to such time as any
person or group of affiliated or associated persons becomes an Acquiring Person)
after the date of the commencement or announcement of a person's or group's
intention to commence a tender or exchange offer the consummation of which would
result in the ownership of 15% or more of the Company's outstanding voting stock
(even if no shares are actually purchased pursuant to such offer); prior
thereto, the Rights will not be exercisable, will not be represented by a
separate certificate, and will not be transferable apart from the Common Stock,
but will instead be evidenced, (i) with respect to any of the shares of Common
Stock held in uncertificated book-entry form (a "Book-Entry") outstanding as of
the Record Date, by such Book-Entry and (ii) with respect to the shares of
Common Stock evidenced by Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate, together with a copy of this Summary of
Rights. An Acquiring Person does not include (A) the Company, (B) any subsidiary
of the Company, (C) any employee benefit plan or employee stock plan of the
Company or of any subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding Common Stock for or pursuant to the
terms of any such plan or (D) any person or group whose ownership of 15% or more
of the shares of voting stock of the Company then outstanding results solely
from (i) any action or transaction or transactions approved by the Board of
Directors before such person or group became an Acquiring Person or (ii) a
reduction in the number of outstanding shares of voting stock of the Company
pursuant to a transaction or transactions approved by the Board of Directors
(provided that any person or group that does not become an Acquiring Person by
reason of clause (i) or (ii) above shall become an Acquiring Person upon
acquisition of an additional 1% or more of the Company's voting stock then
outstanding unless such acquisition of additional voting stock will not result
in such person or group becoming an Acquiring Person by reason of such clause
(i) or (ii). For purposes of the foregoing, outstanding voting stock of the
Company includes voting stock that trades on a "when issued" basis on a national
securities exchange or on the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ").
Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after March 26,
1999 will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
transfer on the Company's Direct Registration System of any Common Stock
represented by a Book-Entry or a certificate outstanding as of March 26, 1999,
and, in each case, with or without a copy of this Summary of Rights attached
thereto, will also constitute the transfer of the Rights associated with the
Common Stock represented by such Book-Entry or certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Rights Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate Rights Certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date.
Unless earlier redeemed by the Company as described below, the Rights will
expire at the close of business on March 26, 2009 (the "Expiration Date") (or,
if the Distribution Date shall have occurred before March 26, 2009, at the close
of business on the 90th day following the Distribution Date).
The Preferred Stock is nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of preferred
stock (i) subordinate to any other series of the Company's preferred stock and
(ii) senior to the Common Stock. The Preferred Stock may not be issued except
upon exercise of Rights. Each share of Preferred Stock will be entitled to
receive when, as and if declared, a quarterly dividend in an amount equal to (i)
1,000 times the cash dividends declared on the Company's Common Stock, and (ii)
a preferential cash dividend, if any, in preference to holders of Common Stock
in an amount equal to $50.00 per share of Preferred Stock less the per share
amount of all cash dividends declared on the Preferred Stock pursuant to clause
(i) since the immediately preceding quarterly dividend payment date. In
addition, Preferred Stock is entitled to 1,000 times any noncash dividends
(other than dividends payable in equity securities) declared on the Common
Stock, in like kind. In the event of the liquidation of the Company, the holders
of Preferred Stock will be entitled to receive, for each share of Preferred
Stock, a payment in an amount equal to the greater of $1.00 per one
one-thousandth of a share plus accrued and unpaid dividends and distributions
thereon or 1,000 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 1,000 votes, voting together with the Common Stock. In
the event of any merger, consolidation or other transaction in which Common
Stock is exchanged, each share of Preferred Stock will be entitled to receive
1,000 times the amount received per share of Common Stock. The rights of
Preferred Stock as to dividends, liquidation and voting are protected by
anti-dilution provisions. If the dividends accrued on the Preferred Stock for
four or more quarterly dividend periods, whether consecutive or not, shall not
have been declared and paid or irrevocably set aside for payment, the holders of
record of the Preferred Stock of the Company of all series (including the
Preferred Stock) will have the right to elect two members to the Company's Board
of Directors.
The number of shares of Preferred Stock issuable upon exercise
of the Rights is subject to certain adjustments from time to time in the event
of a stock dividend on, or a subdivision or combination of, the Common Stock.
The Exercise Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed, in the event that,
after the time that a Person becomes an Acquiring Person, the Company were to be
acquired in a merger or other business combination (in which any shares of
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record, other than the Acquiring Person, of a Right will
from and after such date have the right to receive, upon payment of the Exercise
Price, that number of shares of common stock of the acquiring company having a
market value at the time of such transaction equal to two times the Exercise
Price.
In addition, unless the Rights are earlier redeemed, in the
event that a person or group becomes an Acquiring Person, the Rights Agreement
provides that proper provision will be made so that each holder of record of a
Right, other than the Acquiring Person (whose Rights will thereupon become null
and void), will thereafter have the right to receive, upon payment of the
Exercise Price, that number of one one-thousandths of a share of Preferred Stock
having a market value at the time of the transaction equal to two times the
Exercise Price (such market value to be determined with reference to the market
value of the Company's Common Stock as provided in the Rights Agreement).
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding voting stock, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock per Right (subject to adjustment).
Fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share) may, at the
election of the Company, be evidenced by depositary receipts. The Company may
also issue cash in lieu of fractional shares which are not integral multiples of
one one-thousandth of a share.
At any time on or prior to the close of business on the
earlier of (i) the tenth day after the Stock Acquisition Date (or such later
date as a majority of the Board of Directors may determine) or (ii) the
Expiration Date, the Company may redeem the Rights in whole, but not in part, at
a price of $0.005 per Right (the "Redemption Price"). Immediately upon the
effective time of the action of the Board of Directors of the Company
authorizing redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
For as long as the Rights are then redeemable, the Company may
amend the Rights in any manner, including an amendment to extend the time period
in which the Rights may be redeemed. At any time when the Rights are not then
redeemable, the Company may amend the Rights in any manner that does not
materially adversely affect the interests of holders of the Rights as such.
A Directors Committee consisting of Directors who are neither
officers, employees or affiliates of the Company will review the Rights Plan at
least every three years and, if a majority of the members of this Directors
Committee deems it appropriate, may recommend a modification or termination of
the Rights Plan.
Until a Right is exercised, the holder, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to the Company's report on Form
8-K dated March 10, 1999. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement which is incorporated in this summary description herein by reference.
EXHIBIT B
TO RIGHTS AGREEMENT
[Form of Rights Certificate]
Certificate No. W - ________ Rights
NOT EXERCISABLE AFTER (I) MARCH 26, 2009, OR (II) IF THE DISTRIBUTION
DATE (AS DEFINED BELOW) SHALL HAVE OCCURRED BEFORE THE DATE SPECIFIED
IN CLAUSE (I), THE DATE WHICH IS NINETY (90) DAYS AFTER MARCH 26, 2009,
OR EARLIER IF REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $0.005
PER RIGHT (SUBJECT TO ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED
TO IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN
THE RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS ISSUED TO OR
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE
TRANSFERRED TO ANY PERSON.
Rights Certificate
This certifies that _________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of March 26, 1999 (the "Rights Agreement") between
X. X. Xxxxxx Company, Inc. (the "Company"), and ChaseMellon Shareholder Services
L.L.C., as Rights Agent (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 p.m. (New York City time) on March 26, 2009 (or if
the Distribution Date shall have occurred before March 26, 2009, at the Close of
Business on the 90th day following the Distribution Date) at the office of the
Rights Agent designated in the Rights Agreement for such purpose, or its
successor as Rights Agent, one one-thousandth (1/1,000) of a fully paid
nonassessable share of Series A Junior Participating Preferred Stock, without
par value, of the Company (the "Preferred Stock") at a purchase price of $140,
as the same may from time to time be adjusted in accordance with the Rights
Agreement (the "Exercise Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Preferred Stock which may be purchased upon the exercise
of the Rights evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Preferred Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Rights
Certificate, as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities of the Rights
Agent, the Company and the holders of record of Rights Certificates. Copies of
the Rights Agreement are on file at the principal executive office of the
Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated in the
Rights Agreement for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder of record to purchase a like aggregate number of shares of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof, another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option or
under certain other circumstances at a redemption price of $0.005 per Right. No
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth (1/1,000) of a share) are required to be issued
upon the exercise of any Right or Rights evidenced hereby, and in lieu thereof
the Company may cause depositary receipts to be issued and/or a cash payment may
be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at meeting
thereof, or to give or withhold consent to any corporate action or to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate shall
have been exercised as provided in the Rights Agreement. This Rights Certificate
shall not be valid or obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _____________, ____.
ATTEST:
_________________________________ By:_______________________________
Secretary Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES L.L.C., as Rights Agent
By:______________________________
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificates.)
FOR VALUE RECEIVED _____________________________________
hereby sells, assigns and transfers unto __________________________
__________________________________________________________________ (Please print
name and address of transferee)
_____________________________________________________________________ Rights
evidenced by this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
______________________________ Attorney to transfer the within Rights
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ________________, ____
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Associate or an Affiliate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
Dated: ________________, ____ ________________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder
desires to exercise the Rights Certificate.)
TO:_________________
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Rights Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of such Rights and requests
that certificates for such share(s) be issued in the following name:
Please insert social security
or other identifying number: _______________________
________________________________________________________________________________
(Please print name and address)
_______________________________________________________ If such number of Rights
shall not be all the Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance remaining of such Rights shall be registered in the
name of and delivered to:
Please insert social security
or other identifying number: _______________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ________________, ____
_______________________________________
Signature
(Signature must conform in all respects
to name of holder as specified on the
fact of this Rights Certificate)
Signature Guaranteed
EXHIBIT C
TO RIGHTS AGREEMENT
FORM OF SECOND AMENDED CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
X. X. XXXXXX COMPANY, INC.
Pursuant to Section 151 of the Delaware
General Corporation Law
X. X. Penney Company, Inc., a company organized and existing
under the laws of the State of Delaware (the "Company"), DOES HEREBY CERTIFY:
1. That by resolution of the Board of Directors of the Company
dated January 28, 1986, and by a Certificate of Designations filed in the office
of the Secretary of State of Delaware on January 29, 1986, the Company
authorized the issuance of a series of 1,600,000 shares of Series A Junior
Participating Preferred Stock of the Company (the "Series A Preferred Stock")
and established the voting powers, designations, preferences and relative,
participating and other rights, and the qualifications, limitations or
restrictions thereof.
2. That an Amended Certificate of Designation of the Series A
Preferred Stock was filed with the Secretary of State of Delaware on February
15, 1990.
3. That as of the date hereof no shares of such Series A
Preferred Stock are outstanding and no shares of such Series A Preferred Stock
have been issued.
4. That pursuant to authority conferred on the Board of
Directors of the Company by its Restated Certificate of Incorporation and the
provisions of Section 151(g) of the General Corporation Law of the State of
Delaware, the Board of Directors on March 10, 1999 adopted the following
resolution amending in their entireties the voting powers, preferences, and
relative, participating, optional or other special rights of the shares of the
Series A Preferred Stock, and the qualifications, limitations or restrictions
thereof effective upon the redemption of the rights (the "1990 Rights") issued
pursuant to the Rights Agreement between the Company and ChaseMellon Shareholder
Services L.L.C., as successor Rights Agent, dated February 14, 1990.
RESOLVED, that effective upon the redemption of the 1990
Rights and pursuant to the authority conferred upon the Board of Directors of
the Company by its Restated Certificate of Incorporation and by the provisions
of Section 151(g) of the General Corporation Law of the State of Delaware, the
voting powers, preferences and relative participating, optional or other special
rights of the Series A Junior Preferred Stock of the Company, and the
qualifications, limitations or restrictions thereof, be, and the same hereby
are, amended in their entireties to be as follows:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Company in accordance with the provisions of its Restated
Certificate of Incorporation, a series of Preferred Stock of the Company be, and
hereby is, created and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional or other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated "Series A Junior Participating Preferred Stock" (the "Series
A Preferred Stock") and the number of shares constituting such series shall be
1,600,000.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set
forth, the holders of shares of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per share (rounded to
the nearest cent) equal to 1,000 times the aggregate per share amount of all
cash dividends declared or paid on the Common Stock, 50(cent) par value per
share, of the Company (the "Common Stock") and (ii) a preferential cash dividend
("Preferential Dividend"), if any, on the first day of February, May, August and
November of each year (each a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount equal to $50.00
per share of Series A Preferred Stock less the per share amount of all cash
dividends declared on the Series A Preferred Stock pursuant to clause (i) of
this sentence since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. In the
event the Company shall, at any time after the issuance of any share or fraction
of a share of Series A Preferred Stock, make any distribution on the shares of
Common Stock of the Company, whether by way of a dividend or a reclassification
of stock, a recapitalization, reorganization or partial liquidation of the
Company or otherwise, which is payable in cash or any debt security, debt
instrument, real or personal property or any other property (other than cash
dividends subject to the immediately preceding sentence and other than a
distribution of shares of Common Stock or other capital stock of the Company and
other than a distribution of rights or warrants to acquire any such share,
including any debt security convertible into or exchangeable for any such
share), at a price less than the Current Market Price of such share, then, and
in each such event the Company shall simultaneously pay on each then outstanding
share of Series A Preferred Stock of the Company a distribution, in like kind,
of 1,000 times such distribution paid on a share of Common Stock (subject to the
provisions for adjustment hereinafter set forth). The dividends and
distributions on the Series A Preferred Stock to which holders thereof are
entitled pursuant to clause (i) of the first sentence of this paragraph and the
second sentence of this paragraph are hereinafter referred to as "Participating
Dividends," and the multiple of such cash and noncash dividends on the Common
Stock applicable to the determination of the Participating Dividends, which
shall be 1,000 initially but shall be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Dividend Multiple". In the event
the Company shall at any time after March 26, 1999 (the "Effective Date")
declare or pay any dividend or make any distribution on Common Stock payable in
shares of Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, or issue any of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then in each such case the
Dividend Multiple thereafter applicable to the determination of the amount of
Participating Dividends which holders of shares of Series A Preferred Stock
shall be entitled to receive shall be the Dividend Multiple applicable
immediately prior to such event multiplied by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided for or fixed by or pursuant
to the provisions of Article Fourth of the Restated Certificate of Incorporation
of the Company relating to the rights of holders of any class or series of stock
having a preference over the Common Stock as to dividends, the Company shall
declare each Participating Dividend at the same time it declares any cash or
noncash dividend or distribution on the Common Stock in respect of which a
Participating Dividend is required to be paid. No cash or noncash dividend or
distribution on the Common Stock in respect of which a Participating Dividend is
required shall be paid or set aside for payment on the Common Stock unless a
Participating Dividend in respect of such dividend or distribution on the Common
Stock shall be simultaneously paid or set aside for payment on the Series A
Preferred Stock.
(C) Preferential Dividends shall begin to accumulate on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of any shares of Series A
Preferred Stock. Accumulated but unpaid Preferential Dividends shall cumulate
but shall not bear interest. Preferential Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends at
the time accumulated and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the stockholders of the
Company. The number of votes which a holder of Series A Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Vote Multiple." In the event the
Company shall at any time after the Effective Date declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding shares
of Common Stock into a greater or lesser number of shares of Common Stock, or
issue any of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation, then in
each such case the Vote Multiple thereafter applicable to the determination of
the number of votes per share to which holders of shares of Series A Preferred
Stock shall be entitled after such event shall be the Vote Multiple immediately
prior to such event multiplied by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Restated
Certificate of Incorporation, in any resolution or resolutions of the Board of
Directors of the Company providing for the issue of any other series of
Preferred Stock or by law, the holders of shares of Series A Preferred Stock,
the holders of shares of Common Stock and the holders of shares of any other
class or series of capital stock of the Company entitled to vote generally for
the election of directors shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(C) In the event that the Preferential Dividends accrued on
the Series A Preferred Stock for four or more consecutive quarterly periods
shall not have been declared and paid or set apart for payment, the holders of
record of the Series A Preferred Stock, voting together with the holders of
record of any other series of Preferred Stock of the Company which shall then
have the right, expressly granted by the Restated Certificate of Incorporation
of the Company or in any resolution or resolutions of the Board of Directors of
the Company providing for the issue of such shares of Preferred Stock, to elect
directors upon such a default in the payment of dividends by the Company shall
have the right, at the next meeting of stockholders called for the election of
directors, voting together as a class, to elect two members to the Board of
Directors, which directors shall be in addition to the number provided for
pursuant to the Company's By laws prior to such event, to serve until the next
Annual Meeting and until their successors are elected and qualified or their
earlier resignation, removal or incapacity or until such earlier time as all
accrued and unpaid Preferential Dividends upon the outstanding shares of Series
A Preferred Stock shall have been paid (or set aside for payment) in full. The
holders of shares of Series A Preferred Stock shall continue to have the right
to elect directors as provided by the immediately preceding sentence until all
accrued and unpaid Preferential Dividends upon the outstanding shares of Series
A Preferred Stock shall have been paid (or set aside for payment) in full. Such
directors may be removed and replaced by such stockholders, and vacancies in
such directorships may be filled only by such stockholders (or by the remaining
director elected by such stockholders, if there be one) in the manner permitted
by law. Subject to the foregoing, any directors elected pursuant to this
paragraph 3(C) shall be elected annually and shall not constitute members of any
Class of directors as contemplated by Article Sixth of the Company's Restated
Certificate of Incorporation.
(D) Except as otherwise required by law or set forth herein,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote as set forth herein) for the taking of any corporate action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Participating Dividends
are in arrears or the Company shall be in default in payment thereof, thereafter
and until all accrued and unpaid Preferential Dividends and Participating
Dividends, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid or set aside for payment in full, and in
addition to any and all other rights which any holder of shares of Series A
Preferred Stock may have in such circumstances, the Company shall not
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration, any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends or make any other distributions
on any shares of stock ranking on a parity as to dividends with the
Series A Preferred Stock, unless dividends are paid ratably on the
Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) except as permitted by subparagraph (iv) of this
paragraph (A), redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided that the Company may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Company ranking junior (both
as to dividends and upon liquidation, dissolution or winding up) to the
Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock (either as to dividends or
upon liquidation, dissolution or winding up), except in accordance with
a purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company ranking junior to the Series A Preferred Stock unless the Company could,
under paragraph (A) of this Section 4, purchase or otherwise acquire such shares
at such time and in such manner.
(C) The Company shall not issue any shares of Series A
Preferred Stock except upon exercise of Rights issued pursuant to that certain
Rights Agreement dated as of March 26, 1999 between the Company and ChaseMellon
Shareholder Services L.L.C., as Rights Agent, a copy of which is on file with
the Secretary of the Company at the principal executive office of the Company
and shall be made available to holders of record of Common Stock or Series A
Preferred Stock without charge upon written request therefor addressed to the
Secretary of the Company. Notwithstanding the foregoing sentence, nothing
contained in the provisions hereof shall prohibit or restrict the Company from
issuing for any purpose any series of Preferred Stock with rights and privileges
similar to, different from, or greater than, those of the Series A Preferred
Stock.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares upon their retirement and cancellation shall become authorized but
unissued shares of Preferred Stock, without designation as to series, and such
shares may be reissued as part of a new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
no distribution shall be made (i) to the holders of shares of stock ranking
junior to the Series A Preferred Stock (either as to dividends or upon
liquidation, dissolution or winding up) unless the holders of shares of Series A
Preferred Stock shall have received, subject to adjustment as hereinafter
provided, the greater of (A) $1,000 ($1.00 per one one-thousandth of a share)
plus an amount equal to all accumulated and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, and (B) the
amount equal to 1,000 times the aggregate amount to be distributed per share to
holders of Common Stock, as the same may be adjusted as hereinafter provided, or
(ii) to the holders of stock ranking on a parity upon liquidation, dissolution
or winding up with the Series A Preferred Stock, unless simultaneously therewith
distributions are made ratably on the Series A Preferred Stock and all other
shares of such parity stock in proportion to the total amounts to which the
holders of shares of Series A Preferred Stock are entitled under clause (i)(A)
of this sentence and to which the holders of such parity shares are entitled, in
each case upon such liquidation, dissolution or winding up. The amount to which
holders of Series A Preferred Stock shall be entitled upon liquidation,
dissolution or winding up of the Company pursuant to clause (i)(B) of the
foregoing sentence is hereinafter referred to as the "Participating Liquidation
Amount," and the multiple of the amount to be distributed to holders of shares
of Common Stock upon the liquidation, dissolution or winding up of the Company
applicable pursuant to said clause to the determination of the Participating
Liquidation Amount, which shall be 1,000 but may be adjusted from time to time
as hereinafter provided, is hereinafter referred to as the "Liquidation
Multiple." In this event the Company shall at any time after the Effective Date
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or split or a combination, consolidation or reverse
split of the outstanding shares of Common Stock into a greater or lesser number
of shares of Common Stock, or issue any of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then in each such case the Liquidation Multiple
thereafter applicable to the determination of the Participating Liquidation
Amount to which holders of Series A Preferred Stock shall be entitled after such
event shall be the Liquidation Multiple applicable immediately prior to such
event multiplied by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Certain Reclassifications and Other Events.
(A) In the event that holders of shares of Common Stock
receive after the Effective Date, in respect of their shares of Common Stock any
share of capital stock of the Company (other than any share of Common Stock of
the Company), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or otherwise ("Transaction"),
then in each such event the dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Company of the shares of Series A
Preferred Stock shall be adjusted so that after such event the holders of Series
A Preferred Stock shall be entitled, in respect of each share of Series A
Preferred Stock held, in addition to such rights in respect thereof to which
such holder was entitled immediately prior to such adjustment, to (i) such
additional dividends as equal the Dividend Multiple in effect immediately prior
to such Transaction multiplied by the additional dividends which the holder of a
share of Common Stock shall be entitled to receive by virtue of the receipt in
the Transaction of such capital stock, (ii) such additional voting rights as
equal the Vote Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights which the holder of a share of Common
Stock shall be entitled to receive by virtue of the receipt in the Transaction
of such capital stock and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Company as equal the Liquidation Multiple in
effect immediately prior to such Transaction multiplied by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company by virtue of the receipt
in the Transaction of such capital stock, as the case may be, all as provided by
the terms of such capital stock.
(B) In the event that holders of shares of Common Stock
receive after the Effective Date, in respect of their shares of Common Stock any
right or warrant to purchase Common Stock (including as such a right, for all
purposes of this paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share less than the Current Market Price
(as hereinafter defined) of a share of Common Stock on the date of issuance of
such right or warrant, then in each such event the dividend rights, voting
rights and rights upon the liquidation, dissolution or winding up of the Company
of the shares of Series A Preferred Stock shall each be adjusted so that after
such event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Current Market Price of the
Common Stock at the time of such issuance, by the maximum aggregate
consideration payable upon exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock
receive after the Effective Date in respect of their shares of Common Stock any
right or warrant to purchase capital stock of the Company (other than shares of
Common Stock), including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for capital stock of the Company,
(other than Common Stock), at a purchase price per share less than the Fair
Market Value of such shares of capital stock on the date of issuance of such
right or warrant, then in each such event the dividend rights, voting rights and
rights upon liquidation, dissolution or winding up of the Company of the shares
of Series A Preferred Stock shall each be adjusted so that after such event each
holder of a share of Series A Preferred Stock shall be entitled, in respect of
each share of Series A Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately prior to such
event, to receive (i) such additional dividends as equal the Dividend Multiple
in effect immediately prior to such event multiplied, first, by the additional
dividends to which the holder of a share of Common Stock shall be entitled upon
exercise of such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount Fraction (as
hereinafter defined), (ii) such additional voting rights as equal the Vote
Multiple in effect immediately prior to such event multiplied, first, by the
additional voting rights to which the holder of a share of Common Stock shall be
entitled upon exercise of such right or warrant by virtue of the capital stock
which could be acquired upon such exercise and multiplied again by the Discount
Fraction and (iii) such additional distribution upon liquidation, dissolution or
winding up of the Company as equal the Liquidation Multiple in effect
immediately prior to such event multiplied, first, by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator of
which shall be the difference between the Current Market Price of a share of the
capital stock subject to a right or warrant distributed to holders of shares of
Common Stock as contemplated by this paragraph immediately after the
distribution thereof and the purchase price per share for such share of capital
stock pursuant to such right or warrant and the denominator of which shall be
the Current Market Price of a share of such capital stock immediately after the
distribution of such right or warrant.
(D) For purposes of this Second Amended Certificate of
Designations, the "Current Market Price" of a share of capital stock of the
Company (including a share of Common Stock) on any date shall be deemed to be
the average of the daily closing price per share thereof over the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that, in the event that such Current Market Price of
any such share of capital stock is determined during a period which includes any
date that is within 30 Trading Days after (i) the ex-dividend date for a
dividend or distribution on stock payable in shares of such stock or securities
convertible into shares of such stock, or (ii) the effective date of any
subdivision, split, combination, consolidation, reverse stock split or
reclassification of such stock, then and in each such event, the Current Market
Price shall be appropriately adjusted by the Board of Directors to reflect the
Current Market Price of such stock to take into account ex-dividend or
post-effective date trading. The closing price for any day shall be the last
sale price, regular way, or, in case, no such sale takes place on such day, the
average of the closing bid and asked prices, regular way (in either case, as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange), or,
if the shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the shares are listed or admitted to trading or, if the shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or if on any such date the shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the shares selected by the Board of
Directors. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares are listed or admitted to
trading is open for the transaction of business or, if the shares are not listed
or admitted to trading on any national securities exchange, on which the New
York Stock Exchange or such other national securities exchange as may be
selected by the Board of Directors is open. If the shares are not publicly held
or not so listed or traded on any day within the period of 30 Trading Days
applicable to the determination of Current Market Price thereof as aforesaid,
"Current Market Price" shall mean the fair market value thereof per share as
determined in good faith by the Board of Directors. In either case referred to
in the foregoing sentence, the determination of Current Market Price shall be
described in a statement filed with the Secretary of the Company.
Section 8. Consolidation, Merger, etc. In the event that the
Company shall enter into any consolidation, merger, combination or other
transaction in which shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then in any such
event each outstanding share of Series A Preferred Stock shall at the same time
be similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and other property (payable in like kind), as the case may be,
for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Dividend Multiple, the Vote Multiple or the
Liquidation Multiple in effect immediately prior to such event.
Section 9. Effective Time of Adjustments.
(A) Adjustments to the Series A Preferred Stock required by
the provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each
holder of a share of Series A Preferred Stock of the effect on any shares of any
adjustment to the dividend rights, voting rights or rights upon liquidation,
dissolution or winding up of the Company required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the Company to give such
notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment.
Section 10. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable at the option of the Company or any holder
thereof. Notwithstanding the foregoing sentence of this Section, the Company may
acquire shares of Series A Preferred Stock in any other manner permitted by law,
the provisions of the Amended Certificate of Designations setting forth the
rights, powers and preferences of the Series A Preferred Stock and the Restated
Certificate of Incorporation of the Company.
Section 11. Ranking. Unless otherwise provided in the Restated
Certificate of Incorporation or a certificate of designations relating to a
subsequent series of Preferred Stock of the Company, the Series A Preferred
Stock shall rank junior to all other series of the Company's Preferred Stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up, and senior to the Common Stock.
Section 12. Amendment. After the Distribution Date (as defined
in the Rights Agreement), the provisions of the Amended Certificate of
Designations setting forth the rights, powers and preferences of the Series A
Preferred Stock and the Restated Certificate of Incorporation shall not be
amended in any manner which would materially affect the rights, privileges or
powers of the Series A Preferred Stock without, in addition to any other vote of
stockholders required by law, the affirmative vote of the holders of 66 2/3% of
more of the outstanding shares of Series A Preferred Stock, voting together as a
single class.
5. This Amended Certificate of Designations shall become
effective at 5:01 p.m. on March 26, 1999.
IN WITNESS WHEREOF, X. X. Xxxxxx Company, Inc. has caused this
Second Amended Certificate of Designations to be signed and attested this __ day
of March, 1999.
X. X. PENNEY COMPANY, INC.
By ______________________________
Name:
Title:
ATTEST:
___________________________________
Name:
Title:
